Comprehensive: Income Statement and Supporting Schedules The following is a partial list of the account balances, after adjustments, of Silvoso Company on December 31, 2013:
Depreciation Expense: Buildings and Offïce Equipment $ 14,500
Sales Commissions and Salaries ..............................................18,200
Inventory, January 1, 2013 .............................................................37,800
Sales Supplies Used....................................................................... 5,600
Retained Earnings, January 1, 2013 ..........................................83,700
Purchases Returns and Allowances........................................... 6,200
Bad Debts Expense........................................................................ 2,700
Transportation-in ...........................................................................13,500
Sales Discounts Taken .................................................................4,900
Purchases 173,000 Delivery Expense .......................................7,700
Office Supplies Expense ........................................................1,400
Common Stock, $10 par ............................................................80,000
Loss on Sale of Office Equipment (pretax) .........................5,000
Insurance and Property Tax Expense....................................... 8,500
Sales ..........................................................................................340,700
Rent Revenue ...............................................................................6,900
Office and Administrative Salaries Expense................... 32,000
Promotion and Advertising Expense .....................................17,000
Sales Returns and Allowances ..............................................12,100
Purchases Discounts Taken................................................... 4,100
Depreciation Expense: Sales Equipment............................. 9,600
Interest Expense........................................................................ 3,700
The following information is also available:
1. The company declared and paid a $0.60 per share cash dividend on its common stock. The stock was outstand-ing the entire year.
2. A physical count determined that the December 31, 2013, ending inventory is $34,100.
3. A tornado destroyed a warehouse, resulting in a pretax loss of $12,000. The last tornado in this area had occurred 20 years earlier.
4. On May 1, 2013, the company sold an unprofitable division (R). From January through April, Division R (a component of the company) had incurred a pretax operating loss of $8,700. Division R was sold at a pretax gain of $10,000.
5. The company is subject to a 30% income tax rate. Its income tax expense for 2013 totals $4,230.
The break-down is as follows: Income
Tax Expense (Credit) Related to Amount Continuing income $ 7,440
Operating loss of Division R (2,610)
Gain on sale of Division R 3,000
Loss from tornado (3,600) $ 4,230
6. The company had average shareholders' equity of $150,000 during 2013.
Required:
1. As supporting documents for Requirement 2, prepare separate supporting schedules for cost of goods sold, sell-ing expenses, general and administrative expenses, and depreciation expense.
2. Prepare a 2013 multiple-step income statement for Silvoso. Include any related note to the financial statements.
3. Prepare a 2013 retained earnings statement.
4. Next Level What was Silvosos return on shareholders' equity for 2013? What is your evaluation of Silvosos return on shareholders' equity if last year it was 10%